February 15, 2021
Chinese corn imports expected to reach 24 million tonnes for 2020/21
China's record corn imports are forecast at 24.0 million tonnes for 2020/21.
The country's demand for feedstuffs continues to rise as its swine herd recovers from African swine fever. High corn prices are supporting record feed use of wheat and rice. US exporters reported nearly 5.9 million tonnes of corn sales to China in January for delivery by the end of August 2021. For 2020/21, US total sales and shipments to China stand at a record 17.7 million tonnes at the end of January.
Major global trade changes for 2020/21 include higher projected corn exports for the United States, India and South Africa. For 2019/20, Argentina and Brazil's corn exports are raised for the local marketing year ending February 2021 based on larger-than-expected late-season shipments. Corn imports for 2020/21 are increased for China, with partly offsetting reductions for the European Union, the United Kingdom, South Korea, Japan, India, Saudi Arabia and Turkey.
Global wheat supplies are raised 0.8 million tonnes to 1,073.5 million tonnes. Global production is increased to a record 773.4 million tonness as higher production in Kazakhstan more than offsets reduced production in Pakistan and Argentina.
China's 2020/21 feed and residual use of wheat is forecast at a record 30.0 million tonnes, surpassing the previous 2012/13 record of 26.0 million, and up more than 10 million tonnes from the last year due to record auction volumes of domestic wheat and stronger compound feed production. High domestic corn prices have helped to drive these record auction volumes, with more than 12 million tonnes reported as sold in January.
Beginning in December, domestic wheat prices trended below corn for the first time in more than six years (based on the national monthly average spot price). Chinese wheat imports are raised for the sixth consecutive month to 10.0 million tonnes, the highest level in more than 25 years. France has been the largest supplier for the first half of 2020/21, with landed prices averaging $270/tonne, lower than domestic corn and domestic wheat. This price spread continues to support stronger feed use of wheat and spur imports.
Although rice is not widely used in feed due to its higher price, some feed mills in China are also beginning to use it in feed rations. Recent high corn prices have narrowed the premium that rice typically holds. China has been auctioning older stocks of rice from state reserves at low prices, recently targeting auctions specifically for feed use.
Expanded use of wheat and rice as feed ingredients is expected as a short-term solution to current strong demand but is not expected to persist in the long-term. This present situation is only viable if wheat and rice are released into the market in large enough quantities and at significant price discounts to corn. As old-crop stocks are drawn down, the use of these two grains for feed will likely diminish.